Bank-Customer Agreement Determines Liability in Unauthorized Cryptocurrency Transactions Dispute

Santander Bank Defeats $751K Crypto Lawsuit Over Customer Transfers

In a recent decision, the Massachusetts Appeals Court has dismissed a lawsuit filed by Lourenco Garcia against Santander Bank, effectively ending his two-year legal challenge. The suit, which sought damages of $751,000, was related to unauthorized cryptocurrency transactions.

According to reports, Garcia had authorized debit and wire transfers between December 2021 and January 2022, totaling $751,000. These funds were allegedly used to buy cryptocurrency on fraudulent platforms CoinEgg and Crypto.com. The court ruling has confirmed that Santander Bank had no legal duty to block or investigate the transactions.

Garcia claimed that the bank should have identified and stopped the suspicious activity, as it failed to prevent him from transferring money to a fraudulent crypto platform. However, the court found that Garcia himself authorized all of these transactions, without notifying Santander of any concerns until after the transfers were completed and his funds lost.

In its ruling, the court referred to Santander’s customer agreement, which stated that the bank “may” act in suspected fraud cases. This ambiguity gave the bank permission, but not an obligation, to stop the transactions. The panel also highlighted that there was no legal requirement under the agreement or Massachusetts law for Santander to investigate or block every transfer.

Furthermore, the court noted that banks are not liable when customers send money voluntarily – even if the destination turns out to be a scam. This decision sets a crucial precedent in the crypto regulatory landscape, emphasizing that financial institutions define their role through contracts, rather than customer expectations.

The lawsuit’s dismissal marks an important victory for Santander Bank and could have far-reaching implications for the banking industry as it navigates the ever-evolving world of cryptocurrency.

Source: https://coinchapter.com/santander-bank-defeats-751k-crypto-lawsuit-over-customer-transfers/